Alcoa has entered into an agreement with Alumina Limited, its partner in Alcoa World Alumina and Chemicals (AWAC), to transfer Alcoa's interests in the Juruti (Brazil) bauxite project to AWAC. Alumina Limited holds 40% of AWAC and Alcoa holds the remaining 60%. In connection with the transfer of Juruti to AWAC, Alcoa and Alumina Limited also clarified AWAC's role in future bauxite mining and alumina refining projects in Brazil. Under the Juruti agreement, Alcoa will transfer ownership of its bauxite development rights in the Juruti bauxite deposit to AWAC, and Alumina Limited will contribute US $40 million to AWAC. As a result of this agreement, Alcoa will realize a gain of approximately $37 million, or $0.04 per share, in the fourth quarter of 2004. The Juruti deposit is being considered for development to supply bauxite for a planned expansion of the Alumar refinery, and for potential supply to other AWAC and third party operations. Alcoa's board is expected to review this project and make a final investment decision late in 2005.

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